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St. Mary would bring long history of independence to Alaska’s oil patch Company’s market value exceeds $1 billion; production grew by 40% in 2003, to 76.9 bcf natural gas equivalent, with average daily production of 210.7 mcf Ray Tyson Petroleum News Houston Correspondent
Denver-based St. Mary Land & Exploration Co., whose history dates to the turn of the last century, appears destined to remain an exploration and production independent, a remarkable achievement considering successful independents tend to be gobbled up by bigger fish.
For the first time in the company’s long history, St. Mary’s market value now exceeds $1 billion, placing it in the category of small-to-medium sized independents with a bent for growth.
In 2003, St. Mary grew its production 40 percent from the previous year to 76.9 billion cubic feet of natural gas equivalent, an average daily production rate of 210.7 million cubic feet of equivalent per day.
Net proved reserves at year-end 2003 increased 21 percent over 2002 to 593.7 billion cubic feet of gas equivalent, 89 percent of which were proved developed. That occurred in spite of selling 45.6 billion cubic feet of equivalent of non-core assets. St. Mary’s reserve base at the end of 2003 was 52 percent natural gas and 48 percent oil. Last year the company participated in drilling 181 wells with an 86 percent success rate. $288 million capex budgeted for 2004 St. Mary also has big plans for the current year, budgeting $288 million in capital expenditures, a 25 percent increase over last year’s $231 million budget. Of the total, $188 million was set aside for exploration and development expenditures and $100 million for property acquisitions.
During the 2004 first quarter, the company reported net income of $21.4 million or 66 cents per diluted share on revenues of $97.4 million.
St. Mary operates in five U.S. Lower 48 core areas — the Midcontinent, Rocky Mountains, ArkLaTex, Gulf Coast and Permian Basin. In addition to Denver, St. Mary maintains offices in Tulsa, Okla.; Billings, Mont.; Shreveport, La.; and Houston, Texas.
St. Mary was founded in 1908, incorporated in 1915 and became a public company through an initial public offering of common stock in 1992. However, oil and gas was not on the company’s mind when it formed under the auspices of Chester Congdon, who is said to have made a small fortune from the development of iron mines in Minnesota and copper mines in Arizona.
Beginning in 1900, Congdon and four associates from the mining industry acquired 17,700 acres of lands on the Gulf Coast of Louisiana for the generous sum of $11,000. The St. Mary’s Parish Land Co. was born eight years later. Congdon and an associate purchased 7,200 acres of additional lands under the name of Tidal Wave Land Co. The two companies merged in 1935.
From the start St. Mary investors were largely attracted by the potential of draining the rich marsh lands for agricultural development. Fortunately, they purchased not only the surface rights to these lands but the mineral rights as well. Company went public in 1992 Non-commercial oil accumulations on Belle Isle, together with the celebrated discovery of oil in 1901 at the Spindletop salt dome on the Texas Gulf Coast, raised hope that oil might be found on the St. Mary lands abutting the Belle Isle salt dome. Several exploration failures followed before the predecessor of Texaco drilled a discovery well on state of Louisiana water bottoms in 1933.
On May 6, 1938, the St. Mary No. 1 was completed at a depth of 9,910 feet for 335 barrels of oil per day, establishing the Horseshoe Bayou field, which would become one of the giant accumulations in the United States. Sun Oil Co., the predecessor of Oryx, discovered gas at Belle Isle in 1941.
In 1966, the company’s board of directors recognized the need to build assets to offset depletion of the Louisiana oil and gas reserves. The executive office was moved to Denver and placed under the direction of Tom Congdon, Chester Congdon’s grandson and the company’s chairman until September 2002. Mark Hellerstein is the current chairman, president and chief executive officer.
Employing a staff of fewer than a half dozen, St. Mary began to explore for new reserves in the Rockies and the Midcontinent by affiliating with experienced partners.
Production and reserves grew rapidly through the 1970s, particularly in the Anadarko basin of Oklahoma.
The decision to become a public company through an initial public offering of common stock in 1992 was taken to raise needed capital and to provide liquidity for family shareholders, according to St. Mary records.
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